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Forex pairs in this Article » GBP/USD
FXstreet.com (Barcelona) - George Osborne, UK Chancellor of the Exchequer delivered his Autumn Budget Statement in bullish form, opening with the gambit, “Britain’s economic plan is working.”

The phrase ‘responsible recovery’ was launched early in his speech, a jibe made at the expense of his Labour Party opponents who sat in power during the financial crisis. He added that OBR reassessments of the recession following the financial crisis meant that the economy had shrunk 7.2%, rather than the 6.3% previously estimated. Nevertheless, forecasts show that growth is up, but still slow.

Osborne continued to add that he felt that business taxes are too high, with exports too low and Britain needed to reevaluate its trade relationships with Europe and the US, and concentrate on emerging markets, highlighted by the recent trip by PM Cameron to China. The immediate reaction of GBP was to see cable climb 30 pips off close to its daily low.

Looking to job creation, he continued to note that despite warnings of the contrary, Government statistics showed that for every public sector job lost, three were being created in the private sector. He added that UK employment is at an all time high, in numerical terms, rather than percentage rate, and the OBR are expecting a further 400,000 of jobs created. Unemployment is estimated to fall to 7% in 2015 and 5.6% in 2018.

Further, according to the Chancellor, the OBR are estimating that Britain will run a small surplus by 2019/19, “to bring current structural current budget into balance one year earlier.” Government Debt is now forecasted to be 75.5% of GDP this year, £18bln less than expected, and climbing to 78.3% next year and 80% the year after. He added that future surpluses would be used to tackle down debt levels.

Aiming to encourage further exploration, the Chancellor confirmed that he would issue tax breaks for shale gas, with tax rates halved on the early profits made by fracking firms when producing shale gas in an attempt to encourage exploration. He added that Business rates increases would be capped at 2%, noting that Britain had the second best business tax regime in the world
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